Remote South African municipality is run so poorly that its debtor’s book has grown to R3.2 million

The Vhembe District Municipality is so poor at collecting money that its debtor’s book had increased to R3.168 billion.

This, Jacques Smalle, a member of the Limpopo Provincial Legislature, said, is an indictment of the municipality’s failure to collect money owed to it.

The Vhembe District Municipality is one of the five districts of the Limpopo province of South Africa.

It is the northernmost district in South Africa and shares its border with the Beitbridge District in Zimbabwe and the Gaza Province in Mozambique.

The municipality has been struggling with financial and service-delivery problems for years, and the situation is worsening.

Smalle said that the municipality is grant-dependent, has an unfunded budget, and is in financial distress.

“Vhembe carries the responsibility for potable water delivery, but remains incapable of collecting revenue from its water sales,” he said.

The four largest debtors of the Vhembe District Municipality in Limpopo are:

• Residential households at R2.6 billion
• Businesses at R198 million
• The Department of Education at R63 million
• Local municipalities at R56 million.

The municipality’s outstanding payments are R191 million, with R103 million owed to the Department of Water and Sanitation.

“Vhembe District has many challenges and cannot address them if it cannot collect its own debt,” Smalle said.

“When billions owed remain uncollected, the result is inevitable: deteriorating services, mounting debt, cash-flow crises.”

He said that they will request the MEC for COGHSTA, Pule Shayi, to strengthen the municipality’s revenue collection and debt management.